Wednesday, April 07, 2010

Publishers + Ebooks = Epic Fail

The ebook world is changing fast.

A year ago, we had the Kindle and the Sony Reader as the two main platforms for ebooks. Now we've got Kindle, Sony, Nook, and iPad. Apple sold 300k iPads on its launch day. And this technology hasn't come close to reaching a saturation point with the general population.

New ereaders are going to continue to come out. They'll be better, less expensive, and more widely available. And people will adopt them.

Our society is moving toward a digital future, and the concept of ownership in regard to media is changing rapidly. We don't need to own a tangible object, because we recognize that the content, not the object, is all we care about.

We've actually known this for hundreds of years. The endurance of libraries proves a lot of people are happy to experience media without owning it.

Now we have Netflix and On Demand, and we can watch movies with the press of a button. We have iTunes, and can access the store directly using our mp3 players. We're no longer slaves to the television schedule. Indeed, TV schedules, and TV seasons for that matter, are things of the past. We Tivo, we Hula, we YouTube, we Roku.

And if we don't want to pay, we pirate. Millions of people share billions of files.

If we want it, we can get it instantly, without leaving the comfort of home.

Of course ebooks are going to continue to gobble up greater and greater shares of the publishing market. It's inevitable. Media has become fast food.

So why don't publishers act accordingly?

From July through December 2009, I sold 4840 Kindle ebooks of my Jack Daniels series, earning me $9130.

If I had the rights back from my publisher and priced them at $2.99 each, and they sold an average of 800 copies per month (which is what the average of my five top self-pubbed Kindle titles sell), then I would make $58,752 in a six month period.

By my count, I'm going to lose almost $100,000 per year. Probably more.

You may have noticed that ebook prices are going up. That's because publishers have switched to the agency model, allowing them to control the price. Though no publisher has come out and said it, the reason they're raising the prices of ebooks is twofold.

First, they want to stave off the inevitable dominance of ebooks, and make as much money as they can on print while print is still around.

Second, they believe they need high-priced ebooks to cover the cost of doing business, and that customers will adapt to higher prices.

They're wrong, on all counts.

I sold about 8000 paperbacks that same period. Which is not a lot. Keeping my ebook prices high didn't result in people buying more print books. And as bookstores stock fewer of my titles, those print numbers will go down.

Compare that to roughly 20,000 ebooks I sold by self-pubbing on Kindle during the same period.

On one end, we have a large NY publisher, with distribution muscle to get books into thousands of stores. They're a giant machine that employs a lot of professionals to acquire, edit, print, and sell books.

On the other end, we have a single guy uploading his self-pubbed ebooks to Amazon.

You'd think the NY publisher would cream the single guy in terms of sales. But they didn't. Not only did I double the sales of my publisher, but I made more money per book. Hell, I sold more ebooks than they sold print books and ebooks combined.

Don't you think there's something amiss in the universe when a midlist author can make more money on his own than he can with a big publisher?

Publishers talk about devaluing an ebook by pricing it low. I've said before that the value of a book is what it earns, not what the cover price is. Low-priced ebooks--which are what customers want--earn more than high priced ebooks. My own sales hammer this very simple point home.

People don't care about ownership. They care about price.

People want their media instantly. They don't want to go out and physically shop for it (or order it and wait for the mail to come.)

People want their media without restrictions.

In simpler terms, people want ebooks fast, easy, and cheap, and I can fulfill their needs better than a large company can.

I don't have overhead. I don't have meetings. I can make a decision without answering to my boss. I can turn on a dime. I can publish a book a few days after I write it.

In short, this market is perfect for a one-person operation.

I'd certainly entertain an offer from a large publisher, if they wanted to buy rights for one of my books. But I'm not going to go out looking for the opportunity. Especially since I'll make more money in the long run if I keep my rights.

I could even make more money in the short run.

According to my recent royalty statement, my horror novel AFRAID sold about 54,000 copies in all formats, earning me around $27k.

If I released a Jack Kilborn ebook on my own, and it sold like my current ebooks are selling, I'd make $20k in a year.

It's doubtful I'll make $17K next year on AFRAID, since it's no longer getting coop on bookstore shelves. But I'm sure I'd make $20k, or more, on a self-pubbed ebook.

So in two years I can make more money on my own on a self-pubbed ebook than a book released by a major publisher in hardcover, trade paper, paperback, and ebook formats, supported by a tour and advertising.

118 comments:

Your argument about ebooks and price reminds me of the Sunday morning news piece I saw on the New York City potato peeler salesman -- he sold potato peelers on the street for 99c, and managed to wear thousand dollar suits and live in a penthouse on the Upper East Side. He told his daughter, whom he taught to sell, "Never underestimate the power of of a small amount of money."

I think this is the lesson of ebooks that pubs are not learning, and that you are proving.

I have one self-pubbed book on on Kindle (I'd like to do more) and while it's sold no where near what you sell, it has still sold steadily, and people seem to like it (also, like the potato peeler man, I priced it at .99). It's a novella, and I figured that's a deal for less than a dollar.

But as a person who also only reads e-books, I can attest that I care about price, and I care about content -- and there is more than enough of it at fair prices (or free) so that I can avoid the overpriced offerings pubs put out, if need be, and still be a happy reader.

I've been reading this blog for a while, and Mr. Konrath, you are one of the most forward-thinking authors operating right now. Simple economics dictates the value of something (a book or whatever) is what people will pay for it. With ebooks, cheaper is better. I'd rather "give away" an ebook for a low price than kill sales letting a publisher price it out of competition.

'Tis true, and I think this is what really has the big publishers worried. It's not hard to envision a group of savvy self-marketing authors beginning to eat into the major publishers' profits within five years or so. Indie authors can keep their prices low, and if they offer a good enough product, they might just begin outselling New York, particularly if the major pubs insist on raising their prices instead of trying to cut them.

NYT bestsellers have always been the moneymakers for publishers, and I doubt that's going to change with ebooks. Like you said on another thread, Joe, people will pay the publisher's price for bestsellers. Are publishers going to devalue their bestselling titles by offering midlist titles for a fraction of the cost? I doubt it. Why would they? Wouldn't they, in essence, be competing with themselves?

People might want their ebooks cheap and easy, but they also want their favorite authors. Pricing bestsellers at prices comparable to trade and mass market paperbacks seems like a fair compromise to me.

I definitely agree. And I was one of the 300,000 who bought an iPad on Saturday.

There's one potential snafu re: eBooks on the iPad. Currently, the iBook store navigation is going to hamper the number of people who find your books. And that totally sucks.

You can't sort by price. You're beholden to iTunes/Apple's sorting/display of the books much, much more than the Amazon.com site that allows you to freely sort by price and a lot of different other options.

Sure, Amazon is listing free ebooks, but the entire list is dominated by classic titles from Project Gutenberg.

I'm hoping that readers, authors, publishers, and iBookstore users scream long and loud, and Apple comes to their senses and allows you a plethora of sorting options to find the eBooks in their store.

FYI - I found your ebooks in the iBooks store, but that was only because I specifically searched on your name. You never came up in any list that the iBookstore displayed.

"Are publishers going to devalue their bestselling titles by offering midlist titles for a fraction of the cost?"

I’m not sure it devalues anything, Jude (and I’ve changed my song on this in the last few months, as I imagine many have). Why should content from Lee Child be the same price as content from First-Time-Novelist-No-One-Ever-Heard-Of/Midlist Writer? There’s a disparity in inherent value not being addressed. A million people must have the new Jack Reacher novel, publishers handle brand names very well, so the publisher is in control. They can set a higher price point and people will probably follow. New novelist/Midlist girl isn’t in the same boat. Instead of her product attracting the masses, she is trying to attract the masses. Pricing her content at the same level as Child, Patterson, etc., doesn’t make sense, and sends the wrong message, and almost certainly dooms her book to fail.Blake

You are so right about the one-man-show now competing with the big publishers. Our cost is significanlty smaller. What we indie authors really need now is an explosion of credible reviewers interested in indie authors.

I also agree with the anonymous commenter who said that the big names can command higher prices. Over time this price discrepancy becomes an opportunity for midlist authors to make headway into new audiences. I wonder though, in the future will the big names follow our lead. I don't see why they wouldn't.

One thing you didn't say here is that midlist authors can publish print editions of the same books and eaily make them available through etailers. There are consumers who want paperbacks. I have found a portion of my readers who purchase both. They buy the trade paperback and a Kindle version of the same book and hold onto both.

So I take it you feel that the your first print publisher deserves no credit for the fact that you are a known name who has people searching for your e-books...? It seems like you're saying that the fact that you've had hardcovers and paperbacks in stores for years (and all the pblicity and reviews that go with that) has not boosted your e-book sales. Your e-book sales have not benefited from that army of people that work for your publisher. True?

Why should content from Lee Child be the same price as content from First-Time-Novelist-No-One-Ever-Heard-Of/Midlist Writer?

That's an interesting point, Blake, but I think we have to remember that Lee Child was once a First-Time-Novelist-No-One-Ever-Heard-Of as well. I'm sure his first hardcover was priced the same as Stephen King's effort that year.

Giving books away and offering heavy discounts might be good for promo purposes (bestsellers and midlisters alike), but I don't think we want to get into price structures based on popularity. Being relegated to the bargain basement might make it harder than ever for midlisters to break out.

If age, wisdom, experience and passion count for anything, I am way ahead of any agent or editor in ability to deal with my books. They don't care. To them, a book is a unit. To me, my work has been surgically removed from my body without anesthesia.

Failing with them is a humiliation (I "owe" Penguin $16,000.) Failing on my own is a corking good try.

My agent, btw, is going nuts over this new me. "But eBooks are only 8% of the market! Dead tree publishing is viable!" If that's so true, where's my money to prove it?

but I think we have to remember that Lee Child was once a First-Time-Novelist-No-One-Ever-Heard-Of as well.

If memory serves, Lee's first book made a big splash when it was published. He got all star treatment from his publisher and the huge push that went with it, and it debuted a USA Today bestseller. It wouldn't have done that without coop and a big print run.

I've always believed that brand is important. But so is distribution. It's a chicken/egg argument. Does widespread distribution lead to rand loyalty, or vice-versa? Or both?

I get enough email from raving fans to believe that if WHISKEY SOUR, or THE LIST, had a print run of 350,000 and were available in drugstores, airports, and all the other non-bookstore outlets, it would sell as well as any bestseller available in those same outlets.

With ebooks, this dynamic changes. People are brand loyal, but I think the majority simply buy whatever is directly in front of them. Bestsellers stay bestsellers because they are all that is available in that paperback rack at the supermarket checkout line.

Now the checkout line is Amazon. It's an even playing field. There's now more choice.

And one thing that influences choice is price. Which is why I'm hanging with (and beating) many of the bestselling authors.

I'm showing that price and a nice cover can be even more important than debuting #1 on the NY Times list, because some of my ebooks outsell NYT bestsellers.

We'll see. If I build up enough of a fanbase when that finally happens, maybe I will be able to hang with the big boys.

But then, it really isn't about competition. At $2.99 per book, readers can buy everything that they're interested in. They can get nine ebooks for the price of a current hardcover.

It will be fascinating to see what happens when ebooks overtake print in sales numbers. Will the current bestselling authors still be bestselling authors when they're priced at $12.99? If a NYT bestseller no longer has the advantage of widespread distribution, will they still be able to justify such a high cost?

If publishers could make a book a bestseller with huge print runs and coop placement, then every book published would be a bestseller. I'm not saying those things don't help, but I think an author also has to touch a nerve in a certain demographic among readers to break out in a big way. There have been plenty of books with seven-figure advances and huge print runs and front-table placement that have tanked big time. Putting a bunch of money behind a book is no guarantee of its success.

Ebooks definitely level the playing field as far as distribution goes, but I think a publisher's name on the cover will still mean something in the long run. Eventually people will start realizing that (for the most part) they get what they pay for with ebooks, just like everything else.

When it comes right down to it, I think the big publishers are stalling. While some just have their head in the sand, I think others know they're going to have to change or perish... but they're not ready, and so they are using every bit of power they can to stall while they get their act in gear.

Stephan Jay Gould said that evolution isn't a slow gradual process; it often happens in great leaps. This change is like an earthquake.

If publishers could make a book a bestseller with huge print runs and coop placement, then every book published would be a bestseller.

I'm sure publishers could make any book a bestseller, Jude, with a big enough print run and coop.

But that doesn't mean the book would be profitable.

Medallion just decided to drop their paperback book line and focus on ebooks. Their reason? Paperbacks often are a loss lead.

The secret to having a big print run is having a lot of preorders. In the case of known bestsellers, the bookstores and distributors already have those preorders, so putting money behind those books is less of a gamble.

Preorders can also be "bought." Coop, discounting, the promise of a big advertising blitz--all of that will boost preorders and print-runs. But the publisher can easily loose a ton of money on such an endeavor--and sometimes they do. So every book doesn't get this star treatment.

Instead, publishers use the spaghetti method, throwing a lot of stuff out there, hoping some of it sticks. And then they put their money behind sure things (or educated guesses.)

There is something in your arguments, Joe, that make me uneasy. That doesn't mean you're wrong, just that they make me uneasy.

And it seems like you're making assumptions about continued sales of titles, that if one month a book sells 400 copies, it will continue to sell 400 copies each month. I can sort of see this working if you're cranking out books every month or two--and maybe you can--and continue to keep prices down.

And one of the interesting things about e-books in general is they never go out of print, but their sales may slow down.

This also sort of gets into the area of sales velocity, which really is a lot of what bestseller lists are based on, and as a result, what traditional publishers tend to be more interested in than total volume of sales. Although I'm not sure I've ever heard a publisher say so this directly, my impression is that most publishers want a book that sells X number of copies within 6 weeks or less, instead of X number of copies over the course of a year or two.

For instance, I know that one of Vince Flynn's books a couple years ago sold 5,000 copies at Borders stores across the US on the FIRST DAY OF SALE.

If he had never sold another copy (and of course, he did), they would have been a lot happier with that than an author that sold 5,000 copies over the course of a year.

Joe, there's a third and more insidious reason publishers are inflating ebook prices--they are nailing authors into long-term contracts and hoarding lots of e-rights for the long run. And right now they can say, "Look, you only sold 100 e-books last year, they're worthless." And, in a way, they're right, even if it's chicken-and-egg. Who knows how many copies would sell at reasonable prices?

What is to stop a publisher from saying, "The book is still in print" and actually paying royalties on print books that didn't sell, just so they can hold on to the lucrative ebook rights?

Of course, that's really painting publishers in a bad light, and in my experience I find them to be likable and trustworthy.

But still, I could picture it happening. Or maybe not so blatantly. Maybe publishers will keep books in print, publishing a few hundred at a time, just to keep exploiting the erights. As long as its still in the warehouse, the author can't get the rights back...

I recently attended a seminar taught by a handful of bestselling authors, and the thing they wanted us to take away regarding ebooks is that they're a fraction of their print sales. They weren't big on ebooks, but that's their pov. One of the authors does very well overall, and said his royalty statements sometimes show ebook sales in single digits. I was a little shocked by that. Granted, they are obviously not trying the sort of things you've tried and done.

What kind of advice should an unpublished author draw from your recent posts, Joe? Get an agent, publish traditionally, get your name out there, and then (based on today's post) go indie with ebooks and POD once you think you can sell enough books that way?

So I take it you feel that the your first print publisher deserves no credit for the fact that you are a known name who has people searching for your e-books...?

I don't think people are searching for my ebooks. If they were, they can get them FOR FREE on my website.

If people knew who I was, why wouldn't they download the same books for free?

But my sales are vastly outnumbering my free downloads. And the email I get for my ebooks outnumbers the email I get for my Jack Daniels series. People are discovering me through Kindle.

It seems like you're saying that the fact that you've had hardcovers and paperbacks in stores for years (and all the pblicity and reviews that go with that) has not boosted your e-book sales. Your e-book sales have not benefited from that army of people that work for your publisher. True?

It's impossible to know for sure. But I do know that there are at least a dozen other authors doing well on Kindle who have no prior print deals. So that kind of ruins the theory that my name is what sells.

And how many units had your publisher moved before you started e-book sales?

Whiskey Sour, my first novel, remains the one that has sold the most copies of my first contract. In English, through my US publisher, it has sold around 50,000 copies in all formats over six years in print.

My ebook The List has sold about 15,000 copies in a year. So it is on track to sell more books, and earn more money, than my first published novel.

What kind of advice should an unpublished author draw from your recent posts, Joe? Get an agent, publish traditionally, get your name out there, and then (based on today's post) go indie with ebooks and POD once you think you can sell enough books that way?

I'm hesitant to give advice on this. A month ago I'd say get an agent and traditionally publish. But I was just on the phone today with a friend who has been traditionally published, and I warily cautioned him to look at the numbers before accepting any new offers, because he could potentially make more money on his own.

This blows my mind, BTW. I did NOT expect to ever be a cheerleader for self-publishing.

But numbers are numbers, and my predictions for the future of ebooks have 1 full year of data to support them.

So, hell, I don't know what to tell you, Moses. I do know this for sure:

Everyone needs to make up their own mind. You need to follow your own path, based on your experience and experiments.

Experts are fine to listen to, but no expert (me included) should be considered Gospel.

This has been exactly my thought process which is one reason why I won't enter the game of trad publishing. Granted I don't have the kind of audience you've built, but that's fairly natural. I don't have enough work out yet and I haven't been at this for 8 years.

I think a lot of people want to read ebooks for cheap. By default many people adopting e-readers will be buying indie authors. The dots publishers don't seem to have connected yet:

Readers are going to get used to reading good indies. Whether or not someone self published or trad published is going to mean less and less. And since trad publishers have a dinosaur business model that can't descale and operate like you or I can... well it's going to be interesting.

I think your point about ebook sales slow down is valid, BUT ebooks are still in the growth phase, and likely will be for some time to come. What Joe is experiencing (and what I'm experiencing to a lesser degree) is increased visibility from good kindle store rankings.

The more books you sell, the more books you sell. And as more and more people buy Kindles (I'm getting one this weekend. Squee! Remember when I was all: "I'll never own an e-reader." I was so adorable back then)then folks like Joe are already well positioned for sales.

We're in the gold rush here. Yes, eventually we'll hit saturation, but we're far from it right now.

On your blog, you described independent writers as "anyone who can type on a computer and upload a Word file..."

That pretty much says it all. If your goal is to become a published author, with all the trials and tribulations that go along with that title, then traditional publishing is the way to go.

If your goal is to sling what usually amounts to tripe up on the Kindle site and try to make a few bucks, then jump on the self-publishing bandwagon and sling away.

I have to say a big thanks to people like Joe Konrath and Blake Crouch for encouraging me to follow my dream. Working with an editor at a traditional house has taught me more than I ever imagined. I'm a better writer for it, and I'm learning more every day. That would never have been the case if I had given up and self-published.

So my advice to you (unsolicited as it is) is to follow your dream, whatever that might be.

Zoe, I came *this close* to buying a Kindle last week. Not sure how much longer I'll be able to hold out :D

We're not average readers, because you already have a work on Kindle and I'm considering that route, but our interest is some indication that we're getting closer to a tipping point towards e-readers that will probably come in the next few years or so.

I guess I'm still waiting for the price to drop, but I think that has to be coming before too long ...

@Jude: Thanks for your comments. I'm going to work just as hard on writing and editing my books whether I publish them myself or get a traditional publisher, and in either case they will be critiqued by scores of readers (the first already has) and some professional editors (one already has) before I sling them anywhere.

I'd rather write an amazing book every two or three years than a couple of decent ones every year, no matter how it's published. That's just me.

The book will be my best, in either case. The question is whether I want long-term ownership of the e-rights, or the short-term push and credibility that comes with traditional publishing. I could go either way at this point.

That's fine, but be aware that every self-published author thinks his/her book is the exception. Most of them are delusional.

If a writer is submitting to agents and editors and getting nothing but form rejections, then they probably have a lot more work to do. If a writer bypasses the vetting process altogether (and the value of critique groups and freelance editors varies greatly), then there's no way to know if their work is really publishable or not.

Two words: Test Marketing. I put Kept out on the kindle to see what it would do. If it had done crappy or I'd gotten poor feedback or no feedback from end readers I would have known it wasn't ready. Then I would have taken it off, edited some more, then put it back out there.

Jude, I appreciate the warnings, even though this sort of thing has been discussed here before. I've had a literary agent in the past (for non-fiction, though). I've written professionally in other media for a long time, and honed my writing in general that way.

If you're a delusional writer, then there's no hope for you. If you're not, then you can use (lots of) good early feedback to help you figure out if your work is ready. If it isn't, then you go back to work on it. Rinse, repeat, as long as it takes.

Hundreds of people have already critiqued my WIP, including a best-selling author and a professional editor and some very good writers, and I'm discerning about which comments to take seriously, and which to put aside. But I get that much feedback because I'm determined to have my first novel be of publishable quality, and because I know you can't determine that on your own.

If it isn't up to publishable standards yet, I'll keep working on it until I get qualified feedback saying that it is. Then if it's ready, it should succeed to some degree. If it doesn't, then I was a delusional writer all along and was bound to fail anyway.

I've been leaning towards traditional publishing recently anyway, but it's still up in the air for me for some of the reasons Joe mentioned today.

There's no way to compare reader feedback with what an industry pro with a vested interest in a project can bring to the table.

I finished my first novel about five years ago. Everyone who read it said it was great, even a freelance editor I paid for a sample edit of the opening chapters. I pitched it to an agent at a conference, who requested a partial. That agent was kind enough to write a detailed letter outlining the reasons the novel didn't work. Shortly thereafter, I made friends with an experienced editor who echoed those reasons. Who should I have believed? The readers or the pros?

With some distance--and quite a bit of additional experience--I now realize the pros were, of course, spot-on in their assessments.

I could self-publish that book and make some money, but I won't. It's not publishable, and not fixable. It's a trunk novel, and I gained some experience writing it and submitting it, and that's all it is.

@Jude: Nope, it's not at that stage yet. It's still going to be a little while, and between now and then I'll have to figure out if I want to submit it traditionally or not. I have some agents and editors in mind, if I submit it traditionally. That's what I'm leaning towards doing at the moment.

Spot on. Let's draw the parallel to the music world. Should we track CD sales vs. direct digital downloads for the past few years for proof?

One challenge in sales (and I'm in sales since I own my own business) is that we must make the item desirable and convenient. A good author writing relevant content takes care of the first part. A click of a button and getting that content instantly takes care of the second.

But isn't the plan to price ebooks differently, rather than one cheap price? Won't the reader have the choice to buy the book at $15 when it comes out, or later at $10 or even less than $5? And that's only on some books, not the entire library. Most books, as they say, will be at $5 or less. Less than the standard price now.

Forgive me if someone brought this up before, but isn't your argument just about one high price rather than different tiers and pricing that changes over time? In that case, won't the reader have the very choices you're mentioning, while the publishers get to hold on to larger profits in other areas?

As a small aside, I won't be buying any e-reader as long as the downside to cheap, fast, easy content is Amazon being able to remove and manipulate my content any time they like. I'm not sure how the other ereaders work, but I'll be happier to invest in them if they don't try to control the device I paid for. Because like you said, if we really only cared about content, why don't we all just get a library card? I'm pretty sure they'll have digital downloads for free soon, if they don't already.

Ownership does count for something or iTunes would have been dead on arrival. That's why I believe there would be room for a tiered system. Some people don't care if a book costs $15 if they want the book badly enough (I'm looking at you Harry Potter fans), and no matter how you cut it, the profit margin on $15 is larger for both the author and the publisher.

I get that some people will buy a book only at a certain price point. But if all people were like that, there wouldn't be a luxury market, you know?

Sorry for the ramble, but I just has some thoughts after reading your post. Feel free to just ignore if it doesn't make sense ::Grin::

Honestly I couldn't give a crap what "the industry" thinks about my writing. As long as my readers are satisfied, I'm satisfied. If I want more readers I simply write better books or market them better. Period.

There is no magic dust here.

I don't think some people are "worthy" to be published and some aren't. I think some books/stories are enjoyed by more people than others. I think some make more money than others. But my value system is not the same as yours and I don't accept anyone in the industry's opinion good, bad, or ugly. If they aren't my readers, I don't care. (Incidentally I don't say this because I got a bunch of form letters and people said I sucked, quite the opposite. But I still don't care about their opinions either way.)

Now, granted someone could argue that my readers have no taste, though I would expect anyone making that argument to read my work themselves before making that assessment. But Stephenie Meyer's readers have no taste either and look how freaking rich she is. That passed through the "vetting process." James Patterson passed through the vetting process as well. I'm not not impressed by the vetting process.

Saying I need to be "vetted" by a "trad publisher" first (I almost typed "tard" which I also believe is true), is like saying I'm not allowed to start my own business. A concept completely foreign to me.

The day someone can give me a logical reason why I shouldn't start my own business when I invest my own time and my own money in it, is the day I "might" consider debating the issue. But at this point all anyone has to sell me is a type of validation I neither need nor want.

If I might offer one more piece of advice, it would be to finish your book and then seek criticism from outside sources, sources that know what they're talking about. You can chase your tail forever trying to rework the first few chapters based on this opinion or that.

Finish the book. Whatever your process or future goals, that is the absolute first step.

Good points about windowing. The record industry pressured Steve Jobs to implement windowing (higher prices for newer, more popular tunes), and it was a non starter.

On the internet a perception of unfairness in pricing leads to pirating. It doesn't work.

Joe is right. Windowing (what the publishers are now attempting to do) simply doesn't work in the digital world.

They need to set low value prices to achieve profits on higher volume (what Konrath is doing), but they see this as cannibalizing their DTB sales. It's a huge dilemma for the publishing industry right now.

Windowing is also used in the film biz to great effect. You have a theatrical release, which charges a set ticket price and helps the theater owners make their money (the so-called "popcorn economy") - the movie then moves toward DVD sales (which is where filmmakers make the bulk of their investments back these days) at a different price point. Usually close by (if not simultaneously) the movie heads to Cable/Satellite for the On-Demand outlet where it is priced at another level. Eventually, it makes its way down to the Premium Subscription level (another price point based on what you pay for your monthly cable/sat service) and then into the "Free Movies" category or over on to a broadcast TV station. Meanwhile, the DVD heads to bargain racks at a significantly reduced price.

Each of these windows has a different price point that is dictated by time. In other words, you pay the most for when the movie is just released - you pay for the "privilege" of being able to see it immediately. If you're content to wait, then your price of admission goes down accordingly.

I think this could be an interesting method for ebooks, provided the author establishes a brand, of sorts, that has enough readers/followers who want the book at varying times. If they're content to wait, they can get it cheaper. But some (as others have said) will have to have the book the moment it comes out - so they'll pay more for that "privilege."

I don't know...I'm torn. I've got a new deal with St Martin's for my next book out in Spring 2011 and my agent is still working the contract over because of various issues - e-rights being one of them. I love traditional publishing deals, but I've enjoyed the indie route as well.

However, though I agree piracy might be a problem later, at the moment, it's sort of a moot point. No one's pirating anything because at the moment pirating an ebook is not as easy as ripping a song--especially if open software is not an option. I know the Nook will allow lending for a short period, but during that period, you don't have the book, and you can only lend once. I'm not sure what other readers are like, but I don't see an opportunity for widespread piracy right now. I'm aware, for example, that piracy has happened with books but I'm not convinced piracy is done by people who would otherwise buy the book. If you're going to go that far to avoid paying, I doubt you ever intended to pay at all.

I'm sure readers are boycotting books they think are too expensive. I just don't think they necessarily outnumber the people who will buy a book they really want. Especially if it's a book they've been waiting for.

I'm not so sure ebooks and songs are the best comparative. One takes years to get done, the other takes anywhere from a few hours to a few days. One's several hundred pages of investment, another is 5 minutes and easily forgotten if you don't like it. Easily passed on if you do.

I guess what I'm trying to say is, no one's tried windowing in the digital publishing world. I think the experiment is worth a try and I think it's still to early to decide that every ebook must be $1.99 or $2.99 or no one will make money. Even though I personally know people who refuse to pay more than $10 per book, I also know people who don't care and have paid more.

The biggest complaint I see on Amazon is that a book isn't in Kindle format at all, not that it's not cheap enough. Forgive me if I'm not convinced that if you have a few hundred dollars for a Kindle, you might not be incredibly price sensitive.

As for unfairness, I think it's really unfair that some people think a publisher doesn't deserve the right to set their own price, like every other seller. If you don't like the priceing structure, don't buy the item. But until we try the agency model properly, and see zero sales against everything but $2.99 books, I don't think we've failed to do anything except consider alternatives.

No one's pirating anything because at the moment pirating an ebook is not as easy as ripping a song

I just checked Demonoid, which is a private torrent tracker I belong to. There are currently 28,000 ebooks being shared. I'd be happy to show you a screen pic if you don't believe me. That's just one of hundreds of file sharing sites.

I guess what I'm trying to say is, no one's tried windowing in the digital publishing world.

Douglas Preston tried it. Google him. See what happened. It's ugly.

As for unfairness, I think it's really unfair that some people think a publisher doesn't deserve the right to set their own price, like every other seller.

Actually, very few manufacturers set their retail prices. They set their wholesale prices, and retail is set by the retailer.

Imagine if Chevy suddenly said, "Every new Impala will be sold at exactly $23,000." Or if Coke said, "The price for a 20 oz bottle will always be $1.29, no matter who is selling it or where it is sold."

The retailer should have the right to set whatever price he feels the market will bear. He should be able to discount, offer things on sale, and raise prices as he sees fit.

Publishers pushing the agency model are setting both retail and wholesale price. That's not only unfair, it's stupid.

You've highlighted something that I've been trying to articulate. I felt that music was an unfair comparison. I have to agree--movies use windowing very effectively, even in a digital world. The investment--both creatively and timewise--in a movie has a lot in common with a book. That's why I feel that the agency model has a better chance than first glance.

The other reason is that we already pay more than $10 for a hardcover. We've done that for many, many years. Now, all of a sudden, the masses will rise up and refuse to pay less than the price of a hardcover (and in some cases less than the price of a paperback) because it's unfair? I'm sorry, but that makes no sense to me.

Kindle users will pay less for books than physical books cost. Why are we so sure that masses of readers will fail to see that and want the price of an iTune (which, frankly, can be put together by one guy with a good music programme on his computer) for something that was a much larger and time-consuming investment?

I don't think readers should expect everything to be free or cheap just because it's electronic. I think it's unfair to assume that all authors should accept the same price for their work as a DJ who runs some tracks on an afternoon. I think we deserve a chance to at least try out a formula that allows for us to settle on a middle road.

No offense intended at all, JA, but you're one author. Stephen King was the first big author to try this--he's still with traditional publishing too. Lots of music stars made deals a while back with Walmart to cut out the record companies based on the iTunes model--how many have backtracked since then?

I just think we might need far more feedback before we decide that the agency model / windowing can't work for us based on your sales and the fact that windowing didn't work for the iTunes part of the music industry. In the end, you might still be proved right. Time will tell.

"As for unfairness, I think it's really unfair that some people think a publisher doesn't deserve the right to set their own price, like every other seller."

I believe a publisher does deserve the right to price their product, at the wholesale level. The agency model forces the retailer to accept the publisher's retail price. As a former retailer (a small business I ran selling products to women), I never ran with an agency model -- I was never under contract to price merchandise per orders from the manufacturer/distributor. I could run sales, choose loss leaders, etc -- was allowed to run my business as I saw fit. I never would have accepted a model where I couldn't run my retailing business (set pricing) myself.

Apple doesn't care because selling books is NOT Apple's core (forgive the pun) business -- let the publishers shoot themselves in the foot, it doesn't matter as long as Apple can tout the reader feature on the iPad.

Amazon, on the other hand, is the largest online bookseller (all formats), not a computer manufacturer/seller. The agency model restricts them from running according to their established business model, the one they have deemed to be most profitable.

There are 450,000 books for sale on the Kindle Store at various price points. While some bestsellers are perceived to be "must buys" for some percentage of readers, most look to purchase good books at a good price. The high volume, lower price point is where the most profits reside, and Amazon knows this -- they have more experience selling books than all the publishers combined. Konrath knows it.

The publishers, at some level, know it too, but they are trying to protect their legacy business (DTBs), as this is still 90% of their business. It's easy to understand their dilemma.

I see, so you consider file sharing piracy? I thought it was legal because someone paid for it, and once you own something, you're free to copy or lend. I will admit, I might have got that wrong.

I tried googling Douglas Preston, but couldn't find anything regarding this discussion. I'll take your word for it. I just don't think--again--that one person's experience should be the definitive.

I understand what you're saying about wholesale and retail. You have a good point. Perhaps it's stupid--or perhaps this is the same as the 'suggested retail price' that you usually encounter with most products. A coke in a machine usually costs the same price, anywhere, anytime. If and when it doesn't, the consumer still has the right to walk away or pay. One thing I know for sure--Chevy would not let one customer determine how they priced their cars for wholesale.

I have found this dicussion both interesting and enlightening, but I don't wish to appear intractable or dismissive. In the same way that I know I won't be deterred from paying more for a book I want than $2 or $3, I know that you have cold hard sales facts that you based your position on. I think I've stated my position clearly enough and all else is just back and forth so I'll move on now.

One thing I know for sure, if and when the agency model fails and traditional publishing dies, I'll be the first in line to say, 'You told me so' ::Grin::

There are 450,000 books for sale on the Kindle Store at various price points. While some bestsellers are perceived to be "must buys" for some percentage of readers, most look to purchase good books at a good price. The high volume, lower price point is where the most profits reside, and Amazon knows this -- they have more experience selling books than all the publishers combined. Konrath knows it.

Just saw this, so before I go, I'd just like to say that even Amazon has admitted that they don't make a profit on their price points. $10 books mean a loss for them and a tiny profit margin for publishers. The difference is, Amazon is a lot more than an ebook publisher, so getting you to the site and enticing you with other products is worth a small loss on ebooks. So you see, this does NOT restrict Amazon's profitable business model on ebooks. It avoids making publishers subject to Amazon's business plan for its site, which is why I say I see no unfairness in this.

I presume that you mean they have more experience selling ebooks than traditional publishers combined, as I can't see how a company that young has more experience than publishers that have been around for decades, but I will point out that the Kindle is brand new, so I fail to see where all this experience came from.

You make the retail / wholesale argument and I get where that's coming from. I just don't necessarily agree that means the agency model is wrong for publishing. Every business is different and when you're paying for content rather than a physical product, I think all bets are off.

One thing I know for sure, if and when the agency model fails and traditional publishing dies, I'll be the first in line to say, 'You told me so'

I don't believe the agency model will fail. Eventually, prices will be set how they're always set; by the customer's wallet. I predict that means ebook prices will drop.

Which then begs the question: do authors need publishers?

At current rates, an author would earn 53 cents on a $2.99 ebook if he's got a publisher, vs. $2.04 on the same book if he self-published it.

Authors will quickly realize that deal sucks. If publishers want to survive in an ebook world, they'll have to offer better royalty rates, and prove that they're worth the money being shared with them.

Let's look at a $9.99 ebook, released by a big publisher. Amazon gets $3.00. The author gets the standard 25% of wholesale, or $1.75.

Guess what? I'll be making more money on a $3 ebook than a bestselling author will be making on a $10 ebook.

I'd just like to say that even Amazon has admitted that they don't make a profit on their price points. $10 books mean a loss for them and a tiny profit margin for publishers.

Amazon didn't make a profit before the agency model. With the agency model, they will make a profit. And guess what? The publishers and authors make less money on the agency model than before, when Amazon was using ebooks as a loss lead.

RS - book piracy has been around for years now. I was a member of SFWA when I got the call to go Battle Against the Pirates in 2001 or 2002.

Turns out book pirates are an interesting and dedicated crew. They think of themselves as archivists, and their culture is something like the people who digitize rare film reels - that's just what they love to do in their spare time. I ended up learning enough from them to do some work for the Gutenberg Project for a while. (And many of them do a lot of public domain work as well as piracy.)

Pretty much any book popular enough for price windowing, will be pirated within days of release (if not before).

(1) An e-ink reader (or some sort of passive screen, low energy reader) with long batter life that doesn't need wireless (I plug my iPod into my computer, and it's never been an inconvenience) that can read any ebook formula.

(2) A Netflix style delivery system--I pay a monthly subscription fee on the basis of the number of books I want to have available at any given time on my reader (or max number of books per month like eMusic). I can only read so many books at once, and once I finish one, I don't have it cluttering up my shelf or hard drive space--but I know I can get it again if I want to re-read it.

Not sure how authors would get paid in that system, but I'm sure we could work out a per/reader download price with the provider.

they have more experience selling books than all the publishers combined

I should qualify that . . . they have more experience selling not only ebooks, but books at the retail level (direct to consumer) than the publishers. Amazon is the largest book retailer in the world . . . the publishers are wholesale sellers, and have been operating under that model for many years.

As far as loss leaders, that's what retailers creatively do. My grocery store sells milk at a loss to get me in the door. Should the milk producers insist that they charge more?

Amazon's business objectives were in direct conflict with the the publisher's business goals. Basically Amazon is trying to build a digital book business (and sell Kindle readers), while the publishers are trying to protect their legacy (hard copy sales) business. The friction resulted in the publishers demanding the agency model (where they get to set retail prices on ebooks), basically dictating Amazon's business model and trying to stall the adoption of ebooks. Does this negatively impact Amazon? You bet -- with higher prices for ebooks (the same as hardcopy) it's much harder to sell a $259 ereader (Kindle).

Pretty much this is the publishing industry trying to maintain the existing model for as long as possible, but change is inevitable. As more readers "go digital" the publishers will be forced to lower prices. It's a geologic fact -- time and pressure (and sometimes a little heat as well) will change the earth. In the case of ebooks it won't take millions of years, probably more like 5-10.

By the way, Amazon's strategy is multi-pronged. They were selling ebooks at a loss to promote sales of Kindle, but also encouraging authors to go direct to Kindle store as well (by offering high royalties). This is another strategy to weaken the grip of the big publishers . . . note that Amazon announced the move to 70% royalty about the same time they were in negotiations with the publishers (and being pressured to go to the agency model).

A lot goes on behind the scenes, but Bezos is clever as a fox. Amazon isn't done with this fight yet. They lost one battle (agency model), but it's quite possible they'll win the war.

My prediction: Look for publishers to set up digital book clubs via their own direct-to-consumer sales sites. They'll undercut the pricing they are forcing (through the agency model) on Amazon and Apple.

Amazon will fight back by more aggressively signing top authors to exclusive deals.

RS: "I thought it was legal because someone paid for it, and once you own something, you're free to copy or lend. I will admit, I might have got that wrong."

You're right about the "lend" part, wrong about the "copy". The right to copy (let's give that a catchy name, say "copyright") is reserved by law to the author or whomever the author, uh, authorizes. Even if you've paid for your particular copy.

This is another strategy to weaken the grip of the big publishers . . .

I don't believe Amazon's goal is to weaken big publishers. Their goal is to make money.

It's much easier to make money digitally. Think of how much money can be saved without warehousing, inventory, and shipping.

And going to the agency model wasn't a loss for Amazon. Now they're actually making a profit form ebooks. It won't be a loss for Kindle owners either, because publishers will learn that higher prices mean fewer sales, and they'll adjust accordingly.

I'd be very, very careful about signing over ebook rights to a publisher. Not sure I'd do it at all right now.

If I were a publisher, I wouldn't sign anyone unless I also had ebook rights.

It will be interesting to see how this plays out. I'm not sure agents fully understand this yet. Those that do will make publishers pay handsomely for ebook rights. Those that don't will hurt their authors, and themselves.

That goes without saying. Unfortunately the big publishers are making it difficult (demanding agency model, for starters). Amazon will pursue a strategy to weaken the big publishing power as it is the business strategy needed to meet the profit objective.

Eventually the publishers will cave, but Amazon needs to have that happen sooner (rather than later) as they must build market share as quickly as possible. Speed in building their status as the premier digital book store is an important barrier to competition, not to mention it's necessary to building the market capitalization of the company and strengthening the Amazon brand.

The publishers are dragging their feet at every opportunity, because that is in their best interest (maintaining the legacy model of hard copy book sales).

The publishers are dragging their feet at every opportunity, because that is in their best interest (maintaining the legacy model of hard copy book sales).

Forgot to mention that the publishers are also stalling because they are scrambling to figure out how to operate in the new environment . . . some are setting up separate ebook divisions (Carina, for example), others are in a frenzy over setting up their own etail sites. They need to buy time, so stalling is their best tactic right now.

Eventually they'll come up with some viable models, but there will be pain along the way.

Unfortunately the big publishers are making it difficult (demanding agency model, for starters). Amazon will pursue a strategy to weaken the big publishing power as it is the business strategy needed to meet the profit objective.

Amazon is MAKING money on the agency model. They weren't before.

Publishers aren't hurting Amazon at all with the agency model. They're hurting their authors, and themselves.

They hurt Amazon by setting higher prices. This slows the adoption of digital readers/digital reading (less incentive for the consumer to buy a digital book when the price is same or close to hardcopy price).

When adoption of digital reading slows it buys the publishing industry time to adjust to the new paradigm . . . a good thing for the publishers, but bad for Amazon (Kindle sales, digital book sales slow down). Yes, they make more on each book sold (vs. a small loss), but adoption of the new technology decelerates, and in the long run that's a bad thing.

Amazon needs to capture the digital book market quickly to establish itself as the premier retailer of ALL book formats, especially digital. This is strategic positioning . . . a few dollars lost now will be more than compensated for in future sales. That's the purpose of a loss leader . . . you lose a little on one product/service but more than make it up somewhere else or in future sales (by building extreme customer loyalty, for example).

Amazon wouldn't have fought against the agency model if it brought them a great benefit. It doesn't . . . it hurts their business model going forward.

Amazing post Joe! I read your previous one about ebooks as well and it's really made me think. I like the branding people used in comments as well with 'indie publishing.' I totally agree that if we offer quality writing at a great price, people will be interested because at the end of the day, that's what they really want.

I have a great book that's been sitting on the shelf that I am now considering selling on Amazon after your posts, as well as other projects I'm brainstorming. Thanks again for the idea! Congrats on all the success!

Anon: I'm not sure whether or not the adoption of digital reading will slow based on publisher behavior. For SOME groups of readers maybe. But genres like romance, erotica, sci fi, and horror have some fairly strong digital followings.

I read a lot of romance and erotica and I can get that EASILY in digital without ever resorting to buying a book by a major publisher. Publisher behavior doesn't affect me at all. And I'm getting a Kindle this weekend.

There are also growing numbers of good indie authors I can read affordably. I could go the rest of my life and never read another new release from a NY publisher and not be missing much. I've discovered too much indie and small press talent to buy into the notion that NY publishing is putting out anything terribly edgy or interesting.

And the only authors I'm in any way attached to, are those I've had personal exchanges with. Call me crazy but that personal connection is literally the only thing keeping me buying their books. Sure, they're good writers, but so are a lot of people.

Despite a lot of entertaining reads, there are very few authors who I can say my life would be less rich if I hadn't read their book. And I'm sure I'm not that special either.

Interesting discussion ... I'm inclined to agree with Anon that Amazon fought the agency model not because it was bad for their customers but because it was bad for Amazon. Amazon's stated goal has always been to establish the Kindle as the preferred e-reader platform (hence the loss-leader strategy). When the iPad was on the verge of coming out, and Jobs cut independent deals with publishers, Amazon balked in its strategy. It feared Apple's marketing prowess ...

Amazon's long-term strategy was the same as the car companies. In the 1990s, Ford broke even or lost money on its Escorts, but that was never the point. The point was to get drivers in a Ford so they'll eventually graduate to the very expensive SUVs (and very profitable). Amazon's interest in fighting the agency model was based on its desire to dominate the e-reader market ... you know, they'd rather sell razor blades than razors.

Amazon's interest in fighting the agency model was based on its desire to dominate the e-reader market ... you know, they'd rather sell razor blades than razors.

I'd say that Amazon fought the agency model because they felt--like all retailers feel--like they should have the power to set their own prices on what they sell.

Of course they want to sell Kindles. But everyone seems to use the razor comparison the wrong way. Razor companies sell the razor cheap, then charge a lot for the blades. Amazon was losing money on ebooks (the blades.)

Of course they want Kindle to succeed. There's higher profit to be made on digital content, and much less overhead.

If Amazon was so worried about setting its own pricing, it wouldn't have caved ... it would have made a stand on principle as a retailer. This thing is about dominance in the e-reader market and Apple's move into the market. Amazon (I think correctly) read Apple's entry as a threat to its potential dominance in the e-book market, and Apple (I think correctly) saw that it could basically bribe publishers into helping it establish the iPad. Apple's motives are no more pure than Amazon's—it had no problem breaking the music industry with a pricing structure that was very similar to what Amazon was doing to publishers. You view publishers as wholesalers, but that's only half-applicable. It's not normal for a wholesaler to be held hostage by retail distributors, which is precisely what Amazon was doing by dictating pricing. You're very keen on defending Amazon's right to set prices, but somehow don't have the same enthusiasm for publishers to set their own prices.

Publishers are pawns in this game. Perhaps you're right and they're setting e-book prices too high, and perhaps it will be an epic failure on their part. Time will tell.

I dunno. There seem to be a lot of warm-and-fuzzies around here where Amazon is concerned. It's finally letting the little man catch a break! It's awesome! I can compete with the Big Boys for once! Stupid publishers can't even see what's so obvious to me! Ha ha!

I guess my question is this: after Amazon had lost enough money selling e-books, and after it had established the Kindle as the reader of choice (complete with its noxious DRM), how long do you really think pricing would have 1) stayed low and 2) stayed advantageous to the little guy?

It strikes me there is a window of opportunity right now that Joe is wisely seizing upon. This window was opened by the advent of a disruptive technology, the e-reader, and an ensuing and entirely predictable fight between 800-pound gorillas over market control. But if this is the shape of the future—where little guys can muscle aside big corporations and where Amazon is somehow seen as a defender of all that is pure in entrepreneurial self-publishing—then I'll eat my hat.

I write kid's books, for which there is no appreciable Kindle market, so I'm not invested in this thing. But if I was, I'd try to make as much money as fast as I possibly could until some wise VP comes along at Amazon or Apple and figures out how to take a piece of my pie.

If all the legitimate publishers cut bait, Amazon would be just another vanity press and a literary ghetto.

Amazon needs publishers, but I can see a day when publishers might not need Amazon. If ebooks become as popular as a lot of people seem to think they will, non-proprietary reading devices will dominate the market and publishers will sell largely from their own websites. Why give Amazon 30% of the cover price for basically doing nothing? Right now they're the major distribution channel because of the Kindle, but I think that's going to change.

Something exactly like that ... or basing uploading fees on volume of sales, or restricting access to certain parts of the site based on a fee structure, or charging for keyword search preferences. Something. Oh, it'll be something.

But Jude, isn't that what this whole thing is about? The jump to "nonproprietary reading devices" is a looooong one. I know a lot of people have very strong feelings about this and believe it's inevitable that someday, all formats will be open, but ... well, Apple has done a pretty good job in the music biz of showing that might not necessarily be the case.

Amazon is growing at a breakneck pace, while B&N and Borders are losing revenue. The publishers can't afford to cut and run from Amazon, and they'd be insane (actually their stockholders would sue them) to make such a foolish business decision.

The publishers can't afford to cut and run from Amazon, and they'd be insane (actually their stockholders would sue them) to make such a foolish business decision.

How did an online bookstore (Amazon), a brick and mortar bookstore (B&N(, a computer company (Apple), and an electronics company (Sony), come to dominate the ebook world?

Shouldn't it have been Bertelsman? Random House? Macmillan?

Why isn't Hyperion selling my ebooks for pure profit from their website? On their ereader? To their subscription base?

Amazon saw the future and took a big risk, building and selling an ereader, and now they're the big, bad monopoly because they're successful at it?

Apple has done a pretty good job in the music biz of showing that might not necessarily be the case.

Apple is dominating the music market, not because they were the first to make mp3 players or sell downloads. They simply did it best, and continue to do it best.

They don't own the proprietary mp3 format. There are many different brands of mp3 player available.

But Apple has created a great device, and a store that sells things that work on that device.

I just read something interesting. iPhone sales are down, and many attribute it to the fact that Apple released the 1.3.1 update which hasn't been jailbroken yet.

People don't want restrictions on their gadgets. And when they can't break the restrictions, they don't buy the gadget.

Amazon will eventually embrace universal formats. Now that they're making a profit on ebooks, why not sell to Nook owners and Sony owners and other readers who use ePub format? And wouldn't they sell more Kindles if they made it easy for readers to buy books from everywhere?

Joe, you know I've followed your blog a long time. I've followed your experiments and advice. I'd like to pose a real-world question to you (and anyone with an opinion). Soon I'll be sending my publisher a proposal for my 5th series novel. The previous 4 I had no real reason to worry so much about the ebook rights, but now -- obviously -- the world is changing quickly.

I've just accepted their ebook royalty up to now.

My publisher isn't one of the high-paying ones. We're not talking a lot of money, but I DO get royalties, unlike many others who've published with them. How much of a fuss should I make about keeping the ebook rights of this next book, given that they have so far done all the conversion and posting and have the previous books all available for the major readers? How much should the print rights be worth (or how little) before it's imperative to hold on to the ebook rights?

That is, how do I decide to risk my recalcitrance leading to blowing the print deal?

I have "some" fans, my books sell well enough to go to 2nd printings (so far - we'll see with the third in a few months)...

I think I have a good grasp of all the factors, yet I can't figure out how to make a decision like this -- messing with the holy contract -- given my fairly low mid-list status. Am I just too "small" to risk losing the print deal if they won't relinquish ebook rights? And am I stupid to want to keep them when they do all the work, and the royalty for me is the same?

I can turn this thing over in my head and see a different "yes, but..." for every facet.

Thanks to anyone for some advice and perspective. It may be too early to worry about this, but it's gnawing at me...

I'd like to chime in on your question if it's okay, simply because we seem to sorta be in a similar situation.

With regards to my Lawson Vampire novels, I did four of them through Kensington back in 02-03 and then got dropped. I've been searching for a new home for the series for years. In the meantime, I've launched a production company to turn the books into a TV series. So last Fall I start talking to an editor at St. Martin's about everything that's going on and she reads the books and falls quite in love with them (a first, given my previous editor could give a crap less) and proceeds to try to get her boss to agree to grab all the first four, plus the 5th, and more installments besides.

Now, given that I'm trying to get the TV thing done, I know I need a traditional deal to capitalize on the distribution channels that they have and can get me into stores. But as I've been clawing my way around the industry, I've been doing indie ebooks as well and have become acutely aware - through my own experience and those of folks like Joe - about the value of ebook rights.

St. Martin's obviously wants ebook rights and the royalty rate isn't nearly what I could pull doing the books on my own.

So for me, this comes down to weighing the pros and cons and compromise. I want the traditional print deal so I can get the printed books into as wide a distribution as possible. I fully realize that the ebook royalty sucks, but right now, I want those books out there as much as possible. With the potential for a whole slew of new fans who watch the TV show, of paramount importance to me is making sure they can go into a store and get the books. So I accepted the idea that I get shafted a bit on the ebook side for this.

I wish I didn't have to compromise on this front, but right now, it's the nature of the beast. I've had an orphaned series for so long that to have another big house want it and have an amazing editor who actually EDITS (miracle of miracles) and loves the series, is worth enough to me that I will accept the ebook terms. I'm not nearly big enough to argue for stuff and actually get it (although my agent has done a fantastic job of going through St. Martin's new boilerplate contract and wreaking havoc on them) so it's a matter of what I want most right now.

Plus, I can bring out other Lawson adventures (stories, novellas, etc.) and price those how I want.

That's where I'm at right now. Thought you might get something out reading my perspective.

Frankly, I do not think the major publishers know what is happeing now, what the possibiliteis are, what the future portends regarding ebooks. I believe they are in the dark when they can placidly price ebooks at the same price as the paper books as they did with my City for Ransom and its sequels.

I am in the process of putting up more and more ebooks thanks to you, Joe as I have learned your lessons well. Just got rights BACK to all my fifteen titles with Berkley/Penguin so my Instinct Series and Edge Series are getting their Second Time Around which is great and this time on my terms, my pricing, my cover art, my pub date and no remainders! No returns!

So, we've discussed the merits of ebooks and Amazon exhaustively. Now I want to focus on the other part of the article.

Exactly how are unpublished, newbie writers supposed to ensure their product reaches the masses in a consistent, mostly grammatically correct format with a truly engaging story if the only person judging it is themselves?

How do we keep people who are fooling themselves from clogging up the ebook market with mediocre product, thereby damaging the prospects of those with actual talent? How does a writer with a real desire to publish consistenly produce a quality product without a publisher, ensuring they have a career they can build on instead of an embarassment they have to erase from their publication history?

Because, it's all well and good that the authors and writers here are discussing how they could make money with their backlog of already vetted, polished manuscripts, but no-one's talking about how others are supposed to do that from the get-go.

Newbies don't have a lot of experience to avoid being fleeced by smooth-talking freelance copy-writers, don't have the money and industry know-how to hire their own artists and reputable manscript doctors and don't even know for sure if their books are a good story without outside input. So are we really making sense when we say that self-publishing is real option for someone who is not already published, has a great vetted backlog and now knows enough to clean up their own Word file--or at least find someone reptuable to do it?

Because all this 'we don't need them anymore' stuff is making me highly suspicious. Maybe all the alreadly published writers here don't, but I'm not so sure about the masses of people who haven't been published yet, some of them for a very good reason.

All I know is, I've read self-published books. They suck. They are inconsistently formatted, badly written and usually the writers have a very weak knowledge of the English language. They Mary Sue all over the place and expect me to pay for it. Well, 2.99 doesn't make up for that sort of torture. At least with a publisher, you can form an expectation of what they are publishing and the standard they do it at. At least with the traditional world--where all books might not be great reads--I can open them and dislike the story instead of getting my eye poked out by typos.

And please don't wave iUniverse or CreateSpace at me. They don't do anything a vanity press doesn't. Tell me how we get quality product from a guy uploading a Word file on his own, without having had a career before-hand, and maybe I'll consider this article in a more serious light.

Because right now, at least in the comments section, it all sort of sounds like the crowing of authors who can afford to buck the system after it's helped them create a career.

Most Baen books don't turn up on kindle, but they are sold in all the major formats without drm at their own websites for reasonable prices. Once you've purchased the book, you can download it in any and all formats. They also maintain a library of free books which include first books of series.

How does a writer with a real desire to publish consistenly (sic) produce a quality product without a publisher, ensuring they have a career they can build on instead of an embarassment they have to erase from their publication history?

Good question. The answer is evolving, and I believe it will be a combination of new solutions. The first is a new kind of publishing company (there are some small startups out there already) that offers editing and packaging services. Amazon could be a big part of this, employing editing services for a fee or percentage of the royalties.

Independent reviewers (and readers in the online community) will also vet and separate the wheat from the chaff. This is already happening to a degree, but not enough yet. I don't trust the Amazon community ratings (some independent authors have lots of "friends and family" ratings), so I generally download the free sample. I can usually tell whether it is worth my while by reading the first five pages.

Building a career is another challenge. In the present system I expect that a writer's agent is key in opening doors for the writer and promoting their career. But I think Konrath has given an example of how to build readership and promote a career online (blogs, reader interface, etc), and the model seems to work.

It will all evolve. I expect these issues will work themselves out. If you're a believer in the power of free markets (capitalism) you know that the consumer will make choices and the "best value" products will ultimately win. That's how it works.

In fact, this ebook model is the purest free market capitalism I've seen in a long time. When was the last time you got to set up your lemonade stand without zoning or pricing restrictions, or without some adult tell you to shut it down because it competes with the big industry Coke machine across the street?

This is deregulation of the book market, and deregulation is a good thing -- it promotes free market (capitalism). Friedman would love it! The former CEO of Random House (now at Harvard Business School as a teacher) is loving it too -- he calls it a "wonderful mess". That's the perfect definition of a capitalist system, and as a patriot and American, hey, I'm all for it.

I would like to see indie book review websites that sift through everything submitted to them, from which they pick out those they believe will sell more than 5000 downloads at $2.99. For those they would write a short review, which would be e-mailed to the author. And that review could be presented along with the product description. It makes no sense for a site to do reviews of books picked randomly from slush.

Exactly how are unpublished, newbie writers supposed to ensure their product reaches the masses in a consistent, mostly grammatically correct format with a truly engaging story if the only person judging it is themselves?

I'd find a good writers group, or some like-minded writers to exchange manuscripts with and quid pro quo.

My last five novels have required very little professional editing, because I vet my manuscripts through my peers.

Take writing classes, go to conventions, and talk to other newbie writers. As ebooks take off, we're going to need each other more than we ever had in the past...

I would like to see indie book review websites that sift through everything submitted to them, from which they pick out those they believe will sell more than 5000 downloads at $2.99. For those they would write a short review, which would be e-mailed to the author. And that review could be presented along with the product description.

Excellent idea. A reputable editor could set up this service, and they could charge a fee for each indie review. The author would get a rating (like the Good Housekeeping seal of approval) to display on their product page. Such a rating system would assist readers in making choices, and it would set the bar for quality in indie publications.

And yet, they don't have to. I've read good self-published books, and I'm as picky a reader as you'll find--honestly. They don't have to suck, especially if more and more good writers choose to go this route for reasons that Joe has brought to light.

As Joe said, you can have your work vetted by peers. There are online critique groups where you can hunt around for good partners, as well as local groups and cons. I've swung a trade with a professional editor who is copyediting my entire novel--because whether I publish traditionally or go indie, I want the extra polish.

Yes, there's going to be a lot of junk out there, and sifting through it is a problem. But in addition to the wonders of the internet (rating sites, blogs, social networking sites), we have this other ace up our sleeve: Word of mouth (see also: promotion, internet).

Sorry if this double-posts, I'm trying the name/url option and it's acting a little funny.

As Joe said, writing groups are a great idea for getting feedback and edits. I read my entire novel at a weekly B&N writer's group, printing out a chapter at a time for other writers to mark up and comment on. It was a great vetting process. Most of the writers are also pretty good editors. Having six to eight fellow writers look over your pages, in exchange for returning the favor on their manuscripts, is much better than paying one freelance editor several thousand dollars.

One of the Anon posters asked how indie authors get out there and get readers and a good quality book out there when they are the only ones judging their work?

I talk about this on my blog. I talk about this on Indiereader.com where I blog. And a lot of other indies talk about this too.

Unfortunately there is something in people that just shuts down all rational business-related thought when it comes to writing. And this holds true for the vast majority of ALL writers no matter the stage they are in their careers. Joe is an aberration, which is really sad. It's not that hard to think smart like Joe does about this money stuff. The fact that Joe is one of the first trad published authors to think like this and be really vocal about it, makes me question why self-publishing authors so often take so much crap for ignorance.

It's really just not that hard to get your work “vetted” outside the traditional system. It's called test marketing. Free ebooks, podcasts. You put up a blog, you start engaging with readers. You ask people who have good taste who read your genre who are not your friends to read and give you their honest, brutal opinion. If they aren't your friends and they have a rep for being brutal... there you go. It's not hard to find a good editor. You ASK AROUND. Why is it that many writers take their book to a book doctor or editor to clean it up before it's bought and this is perfectly acceptable but indie authors are too stupid to figure out how to do the same thing?

It's also not that hard to get cover art. You just have to look around and ask around. The Internet is big. All the information is out there for anyone who isn't too lazy to hunt it down. I don't get how we can have Google and people can still walk away without knowledge of how to do something fairly basic.

Self-publishing isn't for everybody but I don't think appealing to the overwhelming stupidity of writers as a group is helpful. How stupid writers are “in general” about business, has nothing to do with any one individual human being willing to take an active participatory role in the business end of things.

Also, your experience reading self-published work and my experience reading it is VASTLY different. The reason being, good smart indies tend to not LOOK like indies. So you don't know. I'd almost bet money you've read a “small press book” that was actually self-pubbed and you loved it.

Something Joe says about needing each other more as ebooks take off is exactly right. The indie author community is a COMMUNITY. And most of us who don't totally suck are that way because we are picking each other's brains and working together as a community.

Indiereader.com already exists vetting good indie books. The only issue is that it doesn't have enough press or reach yet. Everyone wants to keep re-inventing the wheel rather than take advantage of many of the resources already out there.

Full disclosure. I'm am a long time member of a very good online writers group. I am the writer I am today because of everything I learned there. I have a lot of very good beta readers. I know something about writing groups.

Which is why I know that the only thing stupider than not looking up stuff on Google if you have a question, is expecting other writers in a group to vet your manscript to a publishable standard.

For one, writers are people and all different. Some don't like doing things for free for people who will then sell their stuff on the back of the hard work they did reviewing. The sort of sentence level polishing a manuscript needs, few people are interested in doing or skilled enough to accomplish. Others have day jobs and will not look kindly on someone trying to use THEIR time to fix a novel. And even the best reviewers miss a LOT of stuff, even after multiple readings.

In short, even if you belong to a great group, skills levels vary wildly. And that's if the reviewers like your stuff at all. And let's not get into how many authors are petty, petty people who will tell you you suck when you don't, because of pure, old fashioned jealousy.

No, I don't think writers groups are a gift from god. And if you think Googling a book doctor or a cover artist is guaranteed to lead you to a reputable person who won't take your money and run, I have a bridge to sell you in Brooklyn.

In short, it might not be about stupidity at all. It might be some very well-founded concerns about finding REPUTABLE editors and book doctors, which the Internet is really crappy about provding. You can say anything about yourself and your skills online--doesn't mean it's true.

We all know of sites where we can start looking, but that's like acting like knowing where agent sites are means you will find your perfect agent as soon as you look. It's a long process to find someone who wants to join you in producing your work that you can trust and can enter into an arrangement with. And STILL people get taken for a ride.

Being a community is a great thing and it will help us grow and adapt to this changing world, no doubt about it. But I can't see that as the answer to poorly produced books self-published by individuals. And for the record--no, I have not read any self-published books masquerading as small presses. I have been around a while--I can tell the difference.

And let's remember, this article is purporting to help newbies--not writers who have been around a while and can pass judgement on someone who doesn't know about Preditors and Editors or Critters. Remember back to when YOU were a newbie--were you stupid? Or just in need of good direction? And would you have benefitted from a article that tells you to just 'upload your Word file'? Or would have embarassed yourself forever?

Don't know about what a genius you might be, but I think most new writers would realise what the answer is only after making a terrible mistake. How could 'join a writers group and google' really be a definitive answer? If it were that easy, why are more people not sucking?

I hate to say it, but I think this discussion is turning into a cheerleading club about how everything is possible and not really discussing real concerns. Just dismissing concerns with a 'they will sort themselves out' or acting like someone's stupid for airing them. Neither is particularly helpful or truthful.

Full disclosure. I'm am a long time member of a very good online writers group. I am the writer I am today because of everything I learned there.

Full disclosure with me, too. I never had a writers group. The people I currently exchange manuscripts with are all traditionally published authors, some of them bestsellers. Newbies probably won't get the same caliber of crits that I get.

I hate to say it, but I think this discussion is turning into a cheerleading club about how everything is possible and not really discussing real concerns.

I've actually been conflicted about this lately.

One one hand: holy shit, I can make more money outside NY publishing than I can within it. And other people are doing the same.

On the other hand: I DO NOT want to be the poster child for self-publishing, nor do I think everyone can have the same success I'm having.

All I can do is post my results, my experiments, my thoughts and concerns, and try to avoid giving any bad advice.

But I've given bad advice before. And I'm sure I will again. Anyone who makes a major career decision because of a blog needs to re-evaluate their life.

And would you have benefitted from a article that tells you to just 'upload your Word file'?

I think you might be referring to what I said on my blog, and if that's the case, you misunderstood what I said. I said:

"Independent writers–that’s anyone who can type on a computer and upload a Word file–will be able to sell their books through the iBookstore and iBooks app via Smashwords."

That is to say, it's now easy to self-publish to iBooks (or Kindle). That is not to say, write crap and self-publish it.

On the recent points, if someone is sharp and studies writing, they can differentiate between bad and good critiques, bad and good freelancers (for example, references help), and use critique groups to meet the writers that they want to build relationships with. It's not true that the the only people who can improve a book to publishable standards work for big houses in NY. Good writer-friends can do that also.

Thanks, Jon, and congratulations on the new print and TV deals. Sounds like the best of both worlds.

I've had a couple nibbles from TV, one of them pretty serious, but they came to naught (so far). Of course, I think that's where the money really is -- all that cable channel dead space to fill. Independent series are the new wave, really. Though not everything sticks - not sure what's happened to Tanya Huff's Blood Lines after 2 seasons on Lifetime, for instance. But it's a great position to be in!

Joe, thanks, and you're right... of course, I hesitate to sign anything these days, but at the same time, in my mid-list position, which is much, much lower than yours, I may still have no real choice. I think your fan base drove your early ebook sales, and then they became a self-fulfilling prophecy by being on the lists. Plus, you have a wide variety of things available. At my level, there's just not enough content, and not enough fans (some, but not enough) to propel someone like me to that level... but that only makes the decision-making process harder - because then I want to predict what will be best for me "later," and I find I can't.

Of course, I plan to continue looking at all sides and making the best decisions possible. And I can't cut ties with my print publisher as long as they want me.

But it's the wild west out here, and I wish someone wearing a star would ride in and start taming it...

If you think your work is good enough to be on retail shelving, then fork out some cash for a couple of cartons of paperbacks and do the walk of self-distribution shame.

Hell, maybe you're reluctant to spend that money on 'real' books, best you go ebook it then. Design your own cover, get you nephew's geeky friend to do it. Pay someone to do it. Whatever. Just put it out there. Joe's first set of ebook covers were truly shit. Joe knew it. So he changed them. All good.

Maybe the voice in a self-publisher's head is telling them their work is kinda great but kinda crap at the same time. Could you do with an edit to sort your story structure? Okay, go find an editor. Google them. Or look at the author acknowledgments in your favourite books. Some of those shit-hot editors being praised are now freelance. Do some due diligence on their background ... or don't.

If it all fails to eventuate into any long term benefit ... then do it again a different way.

Also, I'm surprised Joe recoils at the prospect of being a Self-publishing poster child. Especially considering that there are probably a few agents, editors and publishers reading his blog in an effort to keep track of digital publishing trends. Which may just suggest that Joe is simply an Ebook Publishing poster child.

I guess the truly wonderful thing about Joe's adventure is that it proves writers can make cash online for very little outlay.

For anyone who has ever tried the old business model of print/distribute/go broke you will be feeling very excited about the future.

For those that haven't ... be grateful that you can now run a publishing business, from 1st draft to customer sale, in your pajamas! For most of us, these businesses may not prove very profitable - but at least it's a start.

Fascinating comments. I'm a reader, with no aspirations to write, though there's days I wish I could be a copy editor!

I bought a Sony reader for myself for Christmas '08. I bought Sony because I refused to spend that kind of money for an ebook reader that I couldn't reach out and touch before purchasing.

Addressing a prior comment - the books I buy for my Sony reader live on my computer. I don't have to worry about having web/wireless access, or someone else manipulating what books I have on my device. I keep my unread ebooks organized the way I want them on the reader. I do periodically back up all the files. Most sites I purchase from say you can download a second copy if something happens to your computer, but also add the caveat that they don't know how long they can maintain an individual's on line bookshelf.

I must also be a very rare exception - I've never bought anything from Amazon. Can't say I've ever gone to their site except when doing a bit of research on what sort of reader I wanted.

I love my ebooks - but do still buy print. I find I do most of my browsing in the brick & mortar book shops, and then go back to the web to hunt up e-copies. Which doesn't bode well for an Indie author. But once I've found someone that I like, I search to see what else is available in ebook.

I want my ebooks to be less expensive than a print copy, but will buy at the same price if necessary. With a big exception - I can't afford hardcover or trade prices. Unless the price for the ebook version is comparable to what a paperback will cost, I won't buy it. I also comparison shop. I'll go to 2 or 3 different websites and buy from the one that has the best price.

My library does lend e-books in adobe format, as well as audio books in .mp3. Somehow they've been set to expire - the ebooks will expire both on your PC and your reader; while Audio expires on your PC but not the device.

I read mainly romance these days, though until about 10 years ago there were more SF and Fantasy on my book shelves than any other genre. The best site I've shopped at to date is the Harlequin ebooks boutique. It has its down falls as well, but is generally the most user friendly site I've been to yet.

Background info for how much of a reader and collector I am - I own over 3,900 titles according to my spreadsheet. 319 of those are ebooks. In 2010 I've obtained 168 books up to April 10 (new and used), most of the new purchases are ebooks. I rarely part with a book.